Solid-state recycling is a sustainable technique for recycling aluminium scrap, and the process before recycling is essential to control the physical properties of the product. In this work, the effect of the thermally-treated chips on the extrudate density was investigated. The aluminium chips were thermally-treated to enrich the alumina layer and reduce compaction pressure during chips compaction before recycled using direct hot extrusion. The chips that were transformed into compacted billets were extruded directly without melting and conducted according to 24 full factorial experimental design. The density test on the recycle extrudate found that the density variation ranged from 2724 to 2983 kg/m3. The ANOVA result showed that all factors investigated were statistically significant. The most significant factor was the preheating temperature, followed by extrusion ratio, chip treatment temperature, chip treatment time, and the interaction of chip treatment-time−extrusion ratio. The predictive model suggested by the ANOVA is useful to predict the density with 1% error. Microstructure examination revealed the presence of alumina entrapped in the recycle extrudate, in which thermal-treated chips contained more alumina than that of the untreated chips. The result indicated that the thermal treatment performed on the chips had enriched the in-situ alumina, affecting the density of the recycle extrudate.